The federal government has cleared the way for Swedish telecommunications firm Ericsson's $1.13-billion takeover of two wireless divisions of Toronto-based Nortel Networks, which declared bankruptcy in January.

Industry Minister Tony Clement announced Wednesday that there are no grounds under the Investment Canada Act for a review of the takeover.

The deal falls under the $312-million value threshold of Investment Canada review guidelines, he said, and Ericsson's Canadian operations already provide extensive benefits to the Canadian economy. Ottawa evaluated the technology on the basis of the $149-million Nortel originally invested in developing it, rather than on the $1.13 billion market value.

Prime Minister Stephen Harper replied then that an attempt to inject government policies into the Nortel-Ericsson deal would run counter to his business and political philosophy.

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